This post is probably directed to Delaware Tax advisors.
I am filing a federal return under Married filing Jointly. I am filing a non-resident return for NJ and a Resident return for Delaware. Delaware has the usual filing status's but has 1 extra. It is "married filing combined separate return". On my NJ non resident return, I paid $3000 in state taxes. Turbo tax does not transfer this amount correctly if you use that extra filing status. When I use married filing jointly, it correctly puts the NJ taxes on the Delaware return. Using the it appears to not transfer the information correctly. On the PIT-RES form all amounts transfer correctly until you get to section Line 25A. For the record when using this new status, both Column A & B get filled out. So All amounts seem to be correct when establishing income and tax due on it by both columns. In my case, My wife is column A with a higher income while I am Column B with a much lower income and tax due.
Using fake tax due amount, my wife show $5000 tax due and I show $400. Then Line 25 correctly places 110 each in both columns for Personal credits and an additional 110 each for being over 60. This would mean a credit in each column of 220. LIne 27 is tax imposed by other states. my wifes column is 0 while mine is 400 which is my DE tax due. It does not transfer over from the NJ state return the 3000 we actually paid which should be a credit to our DE return. THIS IS ONLY WHEN USING THE EXTRA STATUS OF MARRIED FILING COMBINED SEPERATELY. When changing it back to just MARRIED FILING JOINTLY, IT PROPERLY TRANSFERS OVER THE 3000 TO COLUMN B SINCE COLUMN B IS THE ONLY COLUMN USED.
Move onto line 31 for "total refundable credits" in column A it properly adds it to 220, ;but keep in mind there is no NJ tax exclusion put in line 27. On my column it lists 400 which was my DE tax due and does not add in the 110 credits I'm supposed to get. My wife is the only one with NJ income and should show the 3000 in her line. Line 32 calculated tax due so it subtracts Line 31 from Line 25 . In my column it adds to 0 (400-400) In column A its 5000 - 220 for 4800. so total tax due is 4800.
WHAT I DONT UNDERSTAND IS WHAT HAPPENED TO THE CREDIT WE SHOULD GET FOR THE NJ TAXES PAID ON THE NON RESIDENT RETURN WHEN FILING THAT NEW STATUS? FLING A NORMAL JOINT RETURN DID TRANSFER OVER NJ TAXES PAID. IS THERE A FLAW IN TURBO TAX CALCULATIONS? For the record a turbo tax CPA tried to look at this and verified all my entries with regard to W-2 and NJ income are correct. At this point he is not sure why the program is doing this and will try to look at later on and get back to me if he finds something.
I did have an accountant do my taxes last year and going back to look at a return they did under that different status, I noticed their program did the same thing. when I asked, they didn't know why...Hamm strange.
In any case it got changed back t married filing jointly as it was more favorable. Idid ask the DE tax department what the difference was in the status with regard to the return and was told they dont know. Was advised to try both and file with the most favorable.
SO I AM WONDERING IF ANY DELAWARE ACCOUNTING OR TAX PROFESSIONALS CAN EXPLAIN WHY THE NJ TAXES DO NOT TRANSFER OVER TO EITHER OF COLUMN A OR B WHEN FILING MARRIED FILING COMBINED SPERATELY STATUS.
Although I am not yet done when I switch between those 2 status in TT, there is the 3000 difference in tax liability. While they say the new status is generally more favorable, in my case , right now it is not. The norma joint file is 3000 more favorable.
So far no one can explain how or why the numbers calculate like they do. Looking for some input on this or education.
